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The dual role of the government: securities market regulation in China 1980‐2007

Author

Listed:
  • Jingyun Ma
  • Fengming Song
  • Zhishu Yang

Abstract

Purpose - The purpose of this paper is to examine the evolution of China's securities market regulation from 1980 to 2007 and the dual role of the government in this process. Design/methodology/approach - When the government is simultaneously the owner and regulator of the securities market, the evolution of securities market regulation follows a path of compulsory institutional change. China's Government authorities have played a dual role in this process by acting both as the securities market regulator and the controlling owner of the stock exchanges. The paper uses the evolution of China's securities market regulation from 1980 to 2007 to illustrate this theoretical framework. Findings - Using the case of China, this paper provides unique evidence of how securities regulation evolves in response to government direction and supervision if the government is both the owner and the regulator of the securities market. Originality/value - The paper offers insight into issues of securities market regulation in China and other emerging markets.

Suggested Citation

  • Jingyun Ma & Fengming Song & Zhishu Yang, 2010. "The dual role of the government: securities market regulation in China 1980‐2007," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 18(2), pages 158-177, May.
    • Handle: RePEc:eme:jfrcpp:v:18:y:2010:i:2:p:158-177
    DOI: 10.1108/13581981011034014
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    References listed on IDEAS

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    1. Macey, Jonathan R & O'Hara, Maureen, 1999. "Regulating Exchanges and Alternative Trading Systems: A Law and Economics Perspective," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 17-54, January.
    2. Peltzman, Sam, 1993. "George Stigler's Contribution to the Economic Analysis of Regulation," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 818-832, October.
    3. G. William Schwert, 1977. "Public Regulation of National Securities Exchanges: A Test of the Capture Hypothesis," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 128-150, Spring.
    4. Jarrell, Gregg A, 1981. "The Economic Effects of Federal Regulation of the Market for New Security Issues," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 613-675, December.
    5. Schwert, G William, 1981. "Using Financial Data to Measure Effects of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 24(1), pages 121-158, April.
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    Cited by:

    1. Huang, Yong & Uchida, Konari & Zha, Daolin, 2016. "Market timing of seasoned equity offerings with long regulative process," Journal of Corporate Finance, Elsevier, vol. 39(C), pages 278-294.
    2. Mejdi Bektashi & Artor Nuhiu, 2017. "Government Securities Market in Kosovo: Overview and Recent Developments," EuroEconomica, Danubius University of Galati, issue 1(36), pages 85-93, May.
    3. Muhammad Zubair Mumtaz & Zachary Alexander Smith, 2021. "Analyzing the duration of IPOs from offering to listing using the Cox proportional hazards model," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(1), pages 5-43, January.
    4. Congsheng Wu, 2014. "Underpricing of homecoming A-share IPOs by Chinese firms already listed abroad," Review of Quantitative Finance and Accounting, Springer, vol. 43(3), pages 627-649, October.
    5. Zhou, Mingshan & Xiao, Dacheng & Chan, Kam C. & Fung, Hung-Gay, 2019. "The impact of pre-IPO performance pressure on research and development investments of an IPO firm: Evidence from China," Economic Modelling, Elsevier, vol. 78(C), pages 40-46.

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